By Eric Castongia, Zephyr Real Estate
As I wrote this article, I was thinking how to make sense of a schizophrenic market. How can I accurately convey the lack of the typical bump in the marketplace at the beginning of the year, which affects both inventory and prices. How some properties are selling like gangbusters and others aren’t. How the Outer Sunset and Parkside (and Excelsior and Crocker Amazon) are almost literally on fire with the explosion in prices. How the upper end (those properties over $2.5 million or so) has slowed and how many options there are.
As I write this, it becomes more clear that it has more to do with price point than location. Crazy as it sounds, you can only expect so much under $1.5 million, so areas that have historically been lower in price have become the very last place buyers can buy and stay within city limits.
West Portal and Inner Parkside have had an inventory problem ever since they got ‘found’. I’ve heard it called the next Noe Valley and I think that’s accurate. The ease of access, transport and vibrant commercial core are all part of its desirability. When something doesn’t get sold, it’s overpriced; people want the neighborhood and they are willing to buy a quirky house if they have to, to do it. In essence, it has it’s own market within the larger San Francisco market.
- At the close of the first quarter of 2016, we had two active, three pending and six sold (closed).
- Of the six sold, five received multiple offers and five sold over their asking price. Note the sixth sale was an off market sale that sold at asking; if that had been on the market, chances are it would have seen multiple and over asking offers as well.
- The amount of over bids ranged from $102,000 to $335,000 over asking.
- The number of sales at the end of the first quarter 2015 was eight compared to 2016, which was six. I looked back at history trying to make some sense of the numbers to see if it was as expected or not. Generally, there were more sales in ‘hotter’ years and lower numbers in slower years. Interestingly, a slower year would have been 4-6 sales and a ‘hotter’ year would have been 12-15. In this case, I think it has more to do with a lack of inventory, than a slowing of the market.
- Two of the six sales (33%), were reported as all cash (no loan).
- I have noted buyers have become more picky; if they are going to overbid, they want as many of their checkboxes ticked as they can-the net affect is that some listings are getting only one or two offers and not selling quite where they were expected to.
- The best ‘apple’ on the market in the last quarter previously sold in June of 2015 for $1,450,000 and recently sold for $1,525,000 (a 5% increase over nine months).
- In my analysis to determine market value, I do not use median price. Rather, I compare specific property types, sizes, conditions and locations, from quarter to quarter and year to year.
- From the fourth quarter 2015 to the first quarter of 2016, prices stayed even in West Portal/Inner Parkside core. I think this could be an indication of the ‘lack of bump’ at the beginning of the year-which actually started after Labor Day.
- Comparing the first quarters of 2015 and 2016, we saw a 15% increase; note that that increase was only measured on the North Side of Ulloa, as the inventory the West Portal/Inner Parkside core was so limited over the past year, so there wasn’t much to compare.
- Fewer buyers are able to afford West Portal, instead, pushing out further in the Avenues and points south.
Eric Castongia, Broker Associate at Zephyr Real Estate (BRE Lic. No. 01188380) provided this information. The content of this article is an interpretation of data from the San Francisco Multiple Listing Service, the County Tax Record, the internet and Eric’s observations in the marketplace. Eric can be reached by e-mail at Eric@SFHotBuy.com, or via mobile phone at (415)307-1700.